from bloomberg world had chris new york, good afternoon. -- world headquarters in new york, good afternoon. fallinge british pound amid the brussels attacks, leading to more speculation that great britain will leave the eu. scarlet: porsche is showing off its newest luxury sports car. matt miller will talk to porsche's north american president and ceo. alix: professor gives avenue -- country's top

banks. bit ofwe are seeing a unusual action and commodities after the rally. we are seeing a steep come down today. the bloomberg commodity index having its worst day since .urglary nine, down 1.8% 9 worst day since february mud down 1.8%. down after aces climate inventories that have been steeper than estimated. over 9 million barrels added to u.s. inventories last week. gold futures also lower and copper also taking a hit. it is not only about the inventory number, it's about the strength we are seeing in the u.s. dollar. the euro and pound are falling burst the dollar, the dollar strengthening versus the japanese yen. ofheard from james bullard

the federal reserve speaking to bloomberg television and radio. once again raising the prospect of a potential rate increase sooner than some market participants had been anticipating. this adding to the commentary we've been getting recently from other fed officials to that effect. commodities and the increase in the dollar, what does this mean for stocks? we are seeing declines today, led by commodities producers. the dow falling the least of the three major averages. nonetheless, read across the board on another day being characterized by low volume. --terday was the latest lowest trading volume we've seen thus far in 2016. 24% below the 100 day average. in terms of the percentage , atrs down the most today least for the s&p 500, you've got some of the commodities producers present here.

chesapeake energy and devon energy and vertex pharmaceuticals falling as well after a ruling out of the u.k., a medical regulator -- not a recommendation for cystic fibrosis treatment. scarlet: thank you so much, julie hyman. alix: let's check in on the first word news this afternoon. belgiumthorities in theing the ringleader in worst attacks in the country's history. authorities say he was the one who placed the bomb that did not explode. thebrothers were among bombers, one at the airport, one at a subway station. the bombscovered making hide out in brussels and found more than 30,000 explosives. at least 31 people were killed and 270 wounded in yesterday's attacks.

airports around the world boosting security after the brussels bombing. the department of homeland security says there were no specific threats. still, more law enforcement personnel have been assigned to airports, train stations and -- jeb bush is endorsing ted cruz for president. he said the texas senator is a consistent, principled conservative who hasn't shown he can unite -- has shown he can unite the party. the u.s. supreme court hearing arguments today in a case related to obamacare, a challenge from faith-based groups that oppose efforts to ensure employees and students can get cost free birth control. the arrangement makes sure faith-based groups don't have to pay for or arrange for their employees to get contraceptives. groups are still opposed saying

women are still getting birth control under their health plans. john kerry is heading to moscow for talks on ukraine and the syrian cease-fire. the attacks in brussels have underscored the urgency of fighting islamic state. secretary kerry will meet with lavrovir putin and sergei on thursday before heading to brussels. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. i'm mark crumpton. the devastating attacks in brussels taking a toll on the pound as fears of a so-called brexit escalate. take a look at the damage here. i've charted the moving averages of sterling. the 50 day moving average of 1.42, we've dropped right below that. where is the bottom going to be?

will be retested those february lows? extending losses after yesterday's massive drop as well. for more perspective, we've -- we are joined by axel from san francisco. a lot of sentiment, motion driving the pound to its losses. the fundamental reasons to be bearish on the pound? a deficit..k. has the pound is vulnerable to any shock there. if the brexit vote goes against the european union, that is a big fundamental change that takes away uncertainty, but creates huge uncertainty about the path of u.k. going forward. volatility is elevated. i expect that to remain the case until the election.

something like the terrorist attacks in brussels is not good news for the camp that wants to stay in the eu. the sentiment is if we are not part of the eu, we may not have these issues. yes, volatility -- call option not popular right now when it comes to sterling among traders. how much actual downside do you think we could see? axel: there is plenty of downside. it is a bottomless pit, so to speak. some suggest the vote is in favor of the brexit. if that is the case, i can see the pound going substantially lower. if it does not happen, i can see the pound having a substantial relief rally. as far as we are concerned, we

historically like sterling because of its low volatility. that is gone and that's why we don't like the pound right now. we are sure the pound where we .an be scarlet: the attacks led to a massive selloff -- it might be the catalyst for an overdue pullback in risk. yesterday, the markets did not react too much. today, you see quite broadly a selling rally in many of the risk assets that moved up on deflating -- the chinese currency is pushing up and up but in the last couple of days, it has been sliding downward. up,easter holidays coming you have a risk environment -- the euro had been one of the better performing currencies.

that is also why i would not over interpret what is happening now. i need to see a rally in the euro to say this is a risk up scenario. -- risk off scenario. alix: ticket look at the bloomberg here -- take a look at the bloomberg here, historical spread between the dxy and the s&p. we are around the peak levels we've seen in 2002, 2008. is the dollar a risk asset or save haven? axel: that is a good question.

versus the major currencies, most notably versus the euro, it is no longer a safe haven. there is a high correlation to the euro these days. the euro has been the save haven play because interest rates are so much lower in the eurozone. risk is off, people buy back the euro. ourging markets are liquidity play. if you look at the dollar index which is overwhelmingly dominated by the euro, in risk off environment, the dollar index should be falling. it is not a stable correlation, but that is the environment we are in the medium-term right now. onx: what is your take coronation at the g20? ecb will focus on the domestic credit channel, the fed will continue to reduce pressure on the dollar. axel: the agreement is to live

happily ever after. the markets don't listen to these agreements. you would like to appease the markets, but ultimately come i would not give much credence to these things. the s&p has been very highly correlated to the chinese offshore currency. that means the markets are very sensitive to what happens out of china. if you look at the china number, chinese deficits are huge. they financed their growth through deficit spending and that is not very sustainable. -- we cann get this get through this, but the market forces are asking for weaker growth in china, that is ultimately not good for risk assets. we can have everybody shake hands at central banks, but they are focused on fundamentals and the reality will catch up with them. alix: jpmorgan points out today

that we have seen so much money come out of the dollar, hedge funds are so not long right now that the path of least resistance has to be up for the dollar based on positioning. what do you think? axel: history will be our judge. it always depends on the horizon. generally speaking, since last --mer when the fed started -- theme of the pressure lid has come off and we might be in an environment where these correlations aren't so stable. the and has been doing what it doing."osed to be the fundamentals don't change. wants to leverage will borrow in euros or similar

and when risk is off, it will revert. i happen to think is that that will continue to tighten, we will be facing headwinds to risk assets and to me, that means we will have a weaker dollar. coming up in the next 20 minutes, copper is having its worst day in two weeks. we will dig into the metal decline. alix: the new york auto show underway in manhattan. we will hear from the president and ceo of porsche america. we will speak to the professor who authored this paper and hereby he said banks are using a broken method for this trade. -- hear why. ♪

alix: you are watching "bloomberg markets." i'm alix steel. scarlet: i'm scarlet fu. time for our metal bulletin. julie: looking at copper in particular today and the movers from copper. because of the rise in the dollar, that is one of the things that has been putting pressure on commodities. here are some of the copper miners and what they are doing in today's session as we see copper pulled back. southern copper, freeport back mcmoranfreeport falling. copper falling with gold and oil today. you see copper futures down by more than 2%. ,f you look at those miners they have bounced because we've seen commodities bounce as well. , the etf that tracks metals and miners.

-- here is the xm eighte. me.x it has had this outside bounce and rapid bounce on the back of that decline. we've seen some improvement depending on what you're looking at. lme copper inventories have been falling for 24 days in a row. here is the year-to-date chart of that. we've seen a decline in inventories, which would see more positive for copper. one of the things that copper tracks closely with is chinese pmi, a measure of manufacturing. manufacturing, pmi in green along with the copper price. copperhead bounced. chinese pmi has not.

it will be interesting to see what the next readings will be on that front to see if copper's gains can indeed be sustained. alix: my favorite measure is air-conditioning inventory in china. copper.iest read on thanks. still ahead on "bloomberg markets," porsche unveils its latest sports car. a conversation with porsche america's president and ceo, detlev von platen. ♪

scarlet: this is "bloomberg markets." alix: automakers are showing up their newest hot wheels. at the new york international auto show. scarlet: matt miller is there with --

matt: the first time i've met the new head of porsche america. thank you for joining us. in front of this amazing car. people who are not gearheads will not understand the significance of this, the most powerful engine porsche makes in 911 with a stick shift. can you make more? >> unfortunately, we cannot. it was instantly sold out. ofwould not be in favor those people who've already purchased so far. matt: people love the fact that it has the stick shift. .od love the pdk shifts are instantaneous and super crisp. people still like the old school stick shift. people like the actual feel of operating the machine.

do you feel like you will build more products in this direction? >> we will certainly look into the manual gearbox in the future . you guys have done so well with the cayenne. you see more developments in hat direction? klaus: a lot of people are talking about a porsche suv. you go a few years from now at the end of the decade, we will bring a battery electric vehicle . the zero emissions vehicle is the big new thing. hybrids have always been a focus for you.

when will we see that with the 911, the flagship? klaus: there is no clear date we are just saying the 911 has an opportunity for electric. we are building more, i promise. matt: porsche is a brand that is young grasp for so many and deserving fans. are you planning on building more affordable cars for those people? klaus: define affordable. the mcconnell is out for 47,000 n is outlars -- macca for $47,000 u.s. we are always looking at the

potential. at the moment, i cannot say anything about a new -- matt: we can talk off camera. you hit record after record. the industry has been growing at such a fast pace. do you see that slowing down this year or next year? klaus: everybody is talking about the tipping point in the u.s. after five years of constant growth in terms of porsche, 10% and more growth every year since five years, everybody's expecting it to slow down. make a we can still growth story this year. we can still exceed our previous year's sales, but it is slowing down ever so slightly. beyond just growing unit sales, porsche is building a deeper and deeper connection with customers. how is that working out for the company? a lot of wall street employees are driving porsches.

do you see that as a bigger revenue stream in the future? klaus: certainly. porsche experience centers where we have our own track, our own facilities. we are about to finish one on the west coast. we are going to let people in california -- 15,000 people per that we expect to bring their porsche out and ride to the limit. we are seeing a revenue stream from that. you can take your car where it belongs where you can test the limits of that car. klaus: i hope to do that with you someday -- matt: i hope to do that with you someday, klaus zellmer. in a kind of like a kid candy store. , y one stanford university professor will not

give a passing grade to the world's biggest banks when it comes to their accounting practices. ♪

♪ alix: from bloomberg markets,

welcome back. i am alix steel. and i am im --scarlet: scarlet fu. mark crumpton is here. president obama says the world must be united against terrorism, at a press conference in argentina with president maur icio marci. the president's strategy to com isil is about shrinking its safe havens in iraq and syria. donald trump says voters have more confidence in him than in hillary clinton when it comes to a crisis like the brussels attacks. he sat down with mark halperin and john heilemann. trump:trump -- mr. whenever we have a problem, i go up, because people view me as much stronger, and i think they

feel i am much more competent. mark: you can see the interview in its entirety on "with all due respect." house speaker paul ryan is sounding the alarm about the state of politics and spoke on capitol hill. ryan: discourse is really healthy, but when people distrust politics, they lose faith in government. .hey lose faith in our future we can acknowledge this. but we do not have to accept this. speaker ryan says americans cannot lose faith in government, because that could cause them to lose faith in the future, and he condemned the toxic tone of the republican , and hetial primary says it is for politicians to inspire americans instead of appealing to their fears.

a tally of more than 300 security incidents. accountability office says none of the cyberattacks appears to have succeeded. whichad data services, pings to verify personal information. global news, 24 hours a day powered by our 2400 journalists , in more than 150 news bureaus around the world. im mark crumpton -- i am mark crumpton. scarlet, alix? trades, where to go to parties trade a financial instrument, which can be anything, but most popularly interest rate swaps. scarlet: and then they subtract the value from the derivatives,

and professor duffy joins us from paris with more. $2 tolet's say it costs make the trade. how should the accounting work? professor: well, if the bond is $10, it should show up as $10. your shareholders may edit taking a loss on the funding costs. they make your creditors that iraq, the shareholders better off -- they make your creditors better off, the shareholders better off. so what is the better way to basically pay for these traits? fie: well, thee better way is to recognize this. the banks have tens of trillions

of dollars in swaps, and they need to be more conservative about which swaps they take, not try to be conservative by marking them down themselves. what will benefit their shareholders. is there a precedent for this? i ask, because eggs are already playing nd of fast and loose with the rules -- because banks are already playing kind of fast and loose with the rules. more criticism? well, the wayie: they are doing it is actually quite conservative. i think they have been doing this because they have been somewhat confused, not because they have been wanting to circumvent accounting rules. i think they have been confused about how to show their costs, and they have not been doing it the right way. back in 2013, jpmorgan took a loss due to this kind of

derivatives accounting. they also should be charging their trading partners up front for the deals to offset their costs. professor duffie: yes, that is what i was saying. they should be more conservative. it does not mean they will benefit. sometimes the collateral that they have to take on will benefit their creditors so much that the shareholders and up losing money -- end up losing money, so it ends up changing their bid-ask spread. kind of feedback have you gotten from wall street on this? professor duffie: there has been some pushback. changing accounting is not something people like to do. accounting profession still has not recognize what they are doing right now. they have to change. you also lookr,

at the broader economy. you look at what is going on with the fed and the central sex, and before you go, we have to ask you about what is -- you look at what is going on with the fed and the central banks, and before you go, we have to ask you about what is happening. ie: you have to say that based on the last fomc issuingthat the fomc more tolerance for inflation than it had in the past, at least -- is showing more tolerance for inflation than it had in the past. they are more willing to overshoot than they have been. duffie, ok, professor from stanford, joining us from paris, thanks. accelerating cuts five

months after announcing an overhaul, a bank plans to cut jobs in the trading arm of it unit, and it is also exiting some businesses. francine lacqua had an exclusive interview in london and asked about the latest plans with credit suisse. >> we have worked night and day to have a proper plan, and we are very happy to present it to the market, but i will still say that it is still valid. we are presenting some very strong numbers today. billions, and what we have had assessment of the business in market conditions.

you said you were surprised by the positions. when did you find out about them? yes, in january. it was not clear to me. it was not clear to my cfo. that is when i said there needed to be a cultural change, and there have been consequences around that. francine: were people trng to withhold information? hiam: it is a cost problem. if your costs are too high, you will need a revenue-driven strategy. trying to generate revenue at all costs, if i may say so. book andhigh-yielding generating a lot of revenue, so people were elected to reduce it because it would expose a cost

problem, and there was no transparency around that. it already created problems. down, and itaken was ramped up. you are confident this will not happen again? processes in put place to try to make sure it will never happen again. havenot say never, but i good confidence, and we understand what is going on better, and we have better processes in place. that was our exclusive interview with the credit suisse thiam.ntatiave, tidjane alix: and credit markets may no longer be forecasting disaster. plus the latest from the new york auto show, and the

man who could take the head at mercedes. ♪

♪ scarlet: this is "bloomberg markets." i am scarlet fu. alix: and i am alix steel. top news.es in the virgin atlantic. they say the airline backed by billionaire richard branson is reaching out to potential buyers to buy either part or all of the company. shares are higher on the news. is takingmazon.com chief,against a one-time

now working at target, saying he is in violation of a clause about working with a rival in less than 18 months. the man says that lawsuit is without merit. inx: purchases up to percent inruary at target, -- february for new home sales. this is the biggest move in more than five years. western sales have fallen in january. and that is your bloomberg business flash. let's go over to the bloomberg markets desk. julie hyman has the latest. commodities,ine in and deutsche bank says it does not see a commodity price rally , and this is according to analysts over at stockse, and a number of have been downgraded.

two of them you see here. mining,ning, and hecla and we are seeing those stocks. , a frequent mover that we talk about, was down today. we saw one analyst drop coverage entirely, suspending coverage, i should say, the analyst they are range ofey review a operations for 2016 and beyond as highly dependent on the company ability to restructure its balance sheet with creditors, and he called that process highly unpredictable. another analyst cut his from $1.49, and we are seeing other solar stocks down. one company had been in the process of buying vivint. moving to neutral

on another stock, cutting the price target. the average price target was down 3.5% inis today's session, and finally, apache, getting back to commodities, falling as oil prices are declining today. much,t: ok, thank you so julie hyman. in canada, spending billions on infrastructure. outcome, the final deficits not seen in decades? for more, i want to bring in a bloomberg news reporter joining us from toronto. new world today, isn't it, danielle? danielle: it really is a sharp departure from what people were eating. trudeau campaigned to cap the deficit that $10 billion and to

balance the budget, and those have now been blown out of the water. instead, we will see the company running deficits for the next two years. more deficits over the next six years. those numbers are going to sound large in america, but remember, we have got 1/10 of the population here, and as i say, it is a big change in direction, this all through the late 90's, canada was running surpluses. proud of that, and lots of accolades for that, but since 2009, the trajectory has been up, and a 2014we ran a surplus, so this is definitely a change of course -- and in 2014, we ran a surplus, so this is definitely a change. where is that money going to go? danielle: it is a liberal party,

the new people in ottawa, and i have heard that it is like it was years ago. the unemployed, for veterans. the mandate for the budget, supporting the middle class -- income inequality has always been an issue under justin trudeau, and there were some potential revenue-generating tactics they could have implemented, and a worry about one of those was about more aggressively taxing capital gains, and they did not go there, so there was some relief on the business front there. i think the big worry or business is when we return to balance, so the government has -- the big worry for business is when we returned to balance, so the government has said expectations are on track, but there are a lot of questions about that, so that would be a big one for business.

five years is not much time. danielle: and a lot happens with a return to balance. were 1.4% growth this year, fairly conservative, but a take increase next year. some of that should come from the budget. they said they are expecting that half of a percentage point of growth with all of the stimulus in the economy, but the government says we probably will see an increase in oil prices with west texas, and that is far and if interest rates rise, obviously, things will get much trickier, as well, and then i think the question for international investors becomes whether or not the debt to gdp ratio of around 31 percent, which the government has promised to try to stick to, whether that becomes in jeopardy.

longer-term, you cannot fix that with fiscal spending. you know what? that is the perennial problem in canada. hewersjoke that we are of wood and drawers of water. time and time again, they say to use the strong canadian dollar. it has not been something that we have done super well as yet, but there is some money in this budget for innovation and development, and there are some hope that we will get there. scarlet: all right, danielle bochove, thank you. alix: and the next credit bubble. a conversation, next. ♪

♪ alix: welcome back to "bloomberg

markets." i am alix steel. scarlet: and i am scarlet fu. a dovish fed. alix: we are getting a read on the credit market following the recent decision. move into credit markets is something i would not have expected. i think it has a short or medium term effect. demandance of supply and in the credit markets, i do not think it has a permanent effect. matures, -- it had a fairly dramatic effect. as far as the is concerned, i think that was, again, something of a surprise. really, i think the timing of this decision was a surprise to people who took the fed at its word when they said they would be following economic data with

financial commissions. they were somewhat surprised that they chose the march meeting to address the rest of 2016. i am not sure it matters that much. corporate conditions are going to be what matters. had twotime being, you surprises for different reasons, fed and ecb moves. central if this is driven, that is kind of worrying. michael: in the beginning, it is helpful, and in the end, it is somewhat fortuitous. in the u.s., i think it depends on which sector you look at. i think commercial real estate is something we were taught to be concerned about, where even low interest rates are not necessarily helpful. other parts of the corporate sector not so worrying.

become somewhat dependent on central banks to do it, and at a point where central-bank actions actually do not help to change fundamentals -- scarlet: and i wonder about downgrades. have beens&p downgrading them at the fastest pace since 2009. reporter: these are also god's gift to journalists. and that it continues to imply that there is more demand. yes, you know, you have two big things that happened. supplyyear today, so the of fallen angels has diminished, and the other thing is a huge buying opportunity, and you have had record flow, and it is not surprising given that copulation

-- given that combination. >> what impact would that have on the high-yield market? michael: it is of interest rate story. is helped bydit inflation, to an extent. fed has come out and made these statements. -- core he end of 2016 cpi tells you something somewhat different, and if commodity prices have put in something of a low then headline cpi and headline pce, i do not think they will be at surprisingly high levels. >> do you think janet yellen is

overshooting? michael: this is the problem with waiting too long. i think two or three years ago, they had an opportunity, but right now, it is difficult. alix: that was michael shaoul. scarlet: later today, donald trump and ted cruz are asked on "with all due respect." you do not want to miss that one. ♪

♪ david: it is 2:00 a.m. in hong kong. welcome to "bloomberg markets."

♪ david: from bloomberg world headquarters in new york, good afternoon. i am david gura. credit squeeze blind-sided, -- credit suisse blind-sided. competition from under armour. at nike, shares falling as much as 6% today, erasing any gains this year for these pointy goods maker, and will helicopter money soon take flight? a former governor is here to aboutbout policy and at central banks moving further into uncharted territory. the markets to desk, where julie hyman has the latest. julie: